Here’s why the Woolworths (ASX:WOW) share price is inching higher

The Woolworths share price is inching higher after the company posted strong Q1 2021 results. Let’s take a look at the highlights.
The post Here’s why the Woolworths (ASX:WOW) share price is inching higher appeared first on Motley Fool Australia. –

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Woolworths Group Ltd (ASX: WOW) shares are this morning on the rise after the company released an update on its performance for the first quarter of 2021 today. At the time of writing, the Woolworths share price is trading 0.15% higher at $38.87. 

The retailer posted a strong performance, with first quarter sales of $17.9 billion, up 12.3% compared to the previous corresponding period. 

The strong performance is mainly driven by Woolworths’ Australian food sales, which rose 12.9% to $12.0 billion.

“It has been a pleasing start to F21 with all retail businesses delivering strong sales growth and customer metrics remaining solid,” the company said.

Highlights from the Q1 update

  • Group sales of $17.9 billion is 12.3% higher versus Q1 2020.
  • Group e-commerce sales of $1.5 billion up by 87% vs Q1 2020. The number also represents a 69% growth from Q4 2020.
  • September group VOC NPS is 55, up +1 point versus September 2019. VOC NPS is basically a survey of a sample of Woolworths customers in which Woolworths is rated on several criteria. It represents the number of satisfied customers (score of 9 or 10) minus the number of less-satisfied customers (score of 6 or below).
  • Australian food sales rose 12.9% to $12.0 billion.
  • Big W sales rose 20.4% to $1.1 billion.
  • Hotel sales were down 33.2% to $313 million.
  • Endeavour sales in New Zealand rose 11.8% to $2.97 billion.

The company also announced that it paid $164 million in the quarter to remediate salaried staff for salary payment shortfalls. In total, $281 million has been paid to date.

“Despite the Victorian closures, hotels was profitable in the first quarter but materially down on last year. For the rest of the calendar year, we expect elevated sales and costs to continue as customers spend more time at home, continue to embrace eCommerce and we ensure our stores and DCs remain COVIDSafe,” Woolworths said.

These results came on the back of a relatively disappointing full year results Woolworths announced in August, where its net profit after tax (NPAT) had declined by 1.2% even after posting a sales increase of 8% during the financial year.

About the Woolworths share price

The Woolworth’s share price is 7.14% higher in year-to-date trading. Despite outperforming the S&P/ASX 200 Index (ASX: XJO), the Woolworths share price is trailing the performance of supermarket rival Coles Group Ltd (ASX: COL). At the time of writing, the Coles share price has surged more than 21% in 2020. 

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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here’s why the Woolworths (ASX:WOW) share price is inching higher appeared first on Motley Fool Australia.

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